U.S. Toughening White-Collar Penalties

The government is making more white-collar and nonviolent criminals serve hard time.

Under a Justice Department directive, fewer will be sentenced to halfway houses and other "community corrections centers" and more will be locked up in federal prisons.

The change means the immediate transfer of about 125 federal inmates to federal penitentiaries, Bureau of Prisons spokesman Dan Dunne said Tuesday. It also means a better chance of prison time for white-collar crimes such as fraud, insider stock trading and embezzlement.

"The prospect of prison, more than any other sanction, is feared by white-collar criminals and has a powerful deterrent effect," Deputy Attorney General Larry Thompson said in a memo announcing the change.

In a related matter announced last month, the Justice Department is urging the U.S. Sentencing Guidelines Commission to adopt tougher penalties for several white-collar offenses and to restrict the ability of judges to impose more lenient sentences. The commission meets Wednesday to adopt guidelines for a law enacted last year to get tough on corporate wrongdoing.

For years, federal prosecutors have complained when judges or prison officials placed a first-time, nonviolent inmate in a halfway house, where prisoners can be furloughed on weekends and visited often by family, instead of a penitenitiary.

In practice, this has frequently meant that people convicted of economic crimes _ who are often wealthier and better-educated _ were spared prison while those without those advantages weren't.

After learning of a West Virginia case in which a dentist got lenient treatment for tax fraud, the Justice Department's Office of Legal Counsel found that the Bureau of Prisons practice violated federal law requiring confinement for certain convictions. A halfway house or community center, the analysis concluded, is not true confinement.

Halfway houses, where about 8,600 prisoners reside, are intended to help inmates make the transition from prison to society.

Thompson's memo to Kathleen Hawk Sawyer, the Bureau of Prisons director, requires that all halfway house prisoners with more than 150 days remaining on their sentences as of Dec. 20 be transferred to a regular prison.

Sentencing guidelines are still in the works for the law enacted last year to crack down on corporate wrongdoing. The Justice Department's criminal division argues that the guidelines currently proposed would represent only modestly tougher penalties and would leave out many smaller-scale frauds.

"Congress did not intend to ignore such cases and reserve severe punishment only for those whose illegal deeds make the front page," Justice officials said in written comments to the U.S. Sentencing Guidelines Commission.

The current plan, they added, "will send a message to the American people and corporate officers that fraud crimes are not taken seriously."

A commission spokesman said all such comments were being taken into account as the final guidelines are being written.